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Legislative Priority: Rollback Burdensome Regulations

Across the country, businesses are struggling to keep pace with the growing body of government regulations and the costs they impose.

Regulations are typically duplicative, useless rules promulgated by unelected bureaucrats. While they are advanced with feel-good intentions like public safety and clean water, they can come at tremendous costs that depress economic activity and often impact the viability of entrepreneurs attempting to gain a foothold.

For example, studies show that the average cost of regulation on the final price of a new single-family home accounts for a whopping 24%. According to a report by The Heritage Foundation, local-land use restrictions further drive up the price of housing, as seen by the push for more high-density housing in places where costs are spiraling out of control.

The inevitable result of overregulation can again be seen in Illinois, where a study by the Illinois Policy Institute concluded that the burden of regulation in that state contributed to stunted job creation. In Chicago, and throughout Illinois, the black unemployment rate is now more than double that of Texas.

Though it has a strong reputation of being a business-friendly state compared to Illinois, Texas still has a lot of work to do in cutting regulatory burdens and red tape. Texas should turn back the clock on many of these regulations and look to its own successful past as evidence that such measures increase economic growth and improve consumer freedom.

The energy market deregulation that occurred in Texas from 1995 to 2007 perfectly demonstrates the benefits of low barriers to entry and increased competition.

Before then, cities retained original jurisdiction over energy rates within their city limits and competition was non-existent. Through a lengthy process of legislation, deregulation forced utilities to change the structure of managing the entire electricity process from generation to customer service.

By separating the industry into retail providers, distribution/transmission, and power generation, Texas transformed the industry from one of government control to a more competitive retail electric market. In the years since the change, Texas electricity rates have continued to drop well below the national level and consumers now have a host of providers from which to choose.

Energy regulation is particularly damaging to Texans’ economic prosperity, given the large energy sector present in the state. An area of reform that Gov. Greg Abbott has targeted is regulatory permitting in the Eagle Ford Shale, which is causing producers to set up operations in other states.

One way Texas can bolster our economic well-being is by examining where red tape has hindered our progress and seek ways to remove those barriers so that the Lone Star of Texas shines brighter than ever before.

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Brandon Waltens serves as the Capitol Bureau Chief for Texas Scorecard. After managing successful campaigns for top conservative legislators and serving as a Chief of Staff in the Texas Capitol, Brandon moved outside the dome in order to shine a spotlight on conservative victories and establishment corruption in Austin.